Tag Archives: budget

If the states are, as Justice Louis Brandeis famously once said, “laboratories of democracy,” then Kansas has just proven that “trickle down economics” doesn’t work. Like other forms of snake oil and quackery, it should be banished from any serious discussion about the economic remedies we need to fix whatever ails us.

In case you missed it, Kansas’ Republican-dominated legislature has just handed Gov. Sam Brownnback a huge defeat, overriding his veto of a bill that would finally raise taxes after years of starvation budgets that resulted in Kansas schools running on shortened schedules and crumbling infrastructure going unfixed. (Let me add: Tennessee just did a similar thing with the official passage of Gov. Haslam’s IMPROVE Act, our first gas tax increase in almost 30 years. It appears Republicans have finally gotten the message that stuff needs to be paid for, and cutting taxes isn’t the way to raise money. I know, weird, right?)

The legislation undoes the essential components of Brownback’s reforms, which he famously described as part of a “real-live experiment” in conservative governance.

Brownback had reduced the number of brackets for the state’s marginal rates on income from three to two. The legislature will restore the third bracket, increasing taxes on the state’s wealthiest residents from 4.6 percent to 5.2 percent this year and 5.7 percent next year.

Marginal rates on less affluent Kansan households will increase as well, from 4.6 percent to 5.25 percent by next year for married taxpayers making between $30,000 and $60,000 a year and from 2.7 percent to 3.1 percent for those earning less than that.

The legislation also scraps a plan to bring those rates down even further in future years, one of Brownback’s promises to conservative supporters.

Finally, the legislature eliminated a cut Brownback had put in place to help small businesses. Analysts said that the provision had become a loophole, as many Kansans were able to avoid paying taxes entirely by pretending to be small businesses.

Initially, the state forecast that about 200,000 small businesses would take advantage of the break. As it turned out, about 330,000 entities would use Kansas’s new rule. That discrepancy suggests that tens of thousands of workers claimed that their incomes were from businesses they owned rather than from salaries.

“What we were able to do in the last 24 hours can allow us to start down that road, to begin repairing all the damage done after living with Gov. Brownback’s failed tax experiment for five years,” said Annie McKay, who is the president of Kansas Action for Children, an advocacy group in Topeka.

Tuesday’s vote was a rebuke not only for Brownback, but also for Republicans in Washington who have advocated similar cuts in taxes at the national level — including President Trump.

This should forever end the discussion about tax cuts being some magical tonic to lure businesses and increase revenue. Trickle down economics is a fairy tale. Or, for people like our president who prefer a visual representation, let me offer this:

Wow, to hear House Republicans these days, the food stamp program called SNAP is rife with fraud and corruption, has grown too big and is adding to the budget deficit. It must die.

Meanwhile, the same people overwhelmingly supported a new defense bill which, while offering some good protections to victims of sexual assault, also was padded with lots of extra spending. Such as:

The bill also restricts the transfer of detainees from Guantánamo Bay, funds construction of a new East Coast missile defense site and gives the Pentagon $5 billion more than requested for the war in Afghanistan.

What a bunch of fiscal phonies. Guess they’re going to force Senate Democrats to vote against this, so they can run those lovely ads accusing such-and-such liberal of voting against helping sexual assault victims in the military. I can hear it now: “They accuse us of waging a war on women, but look what Senator McLefty CommieHippie did!”

Assholes. Two can play at that game. Look who took food out of the mouth of a hungry child so they can continue to fund wars and killing? And you call yourselves Christians? For shame.

LOS ANGELES — After years of grueling battles over state budget deficits and spending cuts, California has a new challenge on its hand: too much money. An unexpected surplus is fueling an argument over how the state should respond to its turn of good fortune.

The amount is a matter of debate, but by any measure significant: between $1.2 billion, projected by Gov. Jerry Brown, and $4.4 billion, the estimate of the Legislature’s independent financial analyst. The surplus comes barely three years after the state was facing a deficit of close to $60 billion.

Governor Moonbeam did what Ah-nuld was unable to do in two terms. Brown is a Democrat, but a fiscally responsible one. Which just goes to show: if you want to actually balance budgets, not harp and moan about them, elect Democrats.

Republicans who have made the deficit their central ideological focus are, in some sense, the dog that caught the bus. The nonpartisan Congressional Budget Office estimated this month that the deficit for this fiscal year, which ends Sept. 30, will fall to about $642 billion, or 4 percent of the nation’s annual economic output, less than half the 2011 deficit and about $200 billion lower than the agency had estimated three months ago.

The agency forecast that the deficit, which topped 10 percent of the gross domestic product in 2009, could shrink to as little as 2.1 percent of the G.D.P. by 2015, a level most analysts say would be easily sustainable over the long run.

In fact, Republicans’ insistence on chasing the “exploding budget deficit” fairy tale has been problematic for their political strategizing:

House Republicans had envisioned a plan to reach a comprehensive deficit reduction deal predicated on a showdown in July over the debt ceiling. That showdown was supposed to drive both sides back to the bargaining table, but a rapidly falling deficit, rising tax payments and huge infusions of cash from the newly profitable, federally controlled home financing agencies Fannie Mae and Freddie Mac have scrambled those plans. Now, the debt ceiling may not have to be raised until October or November, in the next fiscal year.

Awwww…. Meanwhile, the Tea Party is digging its heels in, continuing to call for cuts and refusing to negotiate with the Senate on reconciling the two chambers’ differing budget proposals. This is all because the Republicans are in utter disarray. I’m not sure an image of a Republican Party unable to find its own ass with a map and a compass is how the GOP envisioned going into the 2014 midterms.

The Army program charged with keeping thousands of eight-wheeled Strykers running over the past decade had its eye so much on wars in Iraq and Afghanistan that it neglected to keep its books.

It accumulated nearly $900 million worth of Stryker replacement parts – most of them in an Auburn warehouse – with much of the gear becoming outdated even as the military continued to order more equipment, according to a Defense Department Inspector General report released late last year.

Take, for instance, the $57 million worth of obsolete infrared equipment the Army has not installed in Strykers since 2007. It lingered at the Stryker warehouse until the Inspector General called attention to it last year.

Or, the 9,179 small replacement gears called pinions the Army bought as a temporary fix for a Stryker suspension problem that surfaced between 2007 and 2009. The Army took care of the root malfunction in 2010, but kept buying pinions.

It needed only 15 of the gears. The 9,164 extra pinions are worth $572,000, the Inspector General reported.

Yes, Republicans. Do tell me how we can’t possibly cut the Pentagon budget without “endangering the homeland.” I’m all ears. And while you’re at it, remind me how food stamps and Head Start are budget-busters but the Pentagon ordering hundreds of millions of dollars of parts it can’t even use is not.

The Stryker inventory is purchased from major defense contractor General Dynamics, which has a no-bid contract. They, of course, had no comment. Of interest:

The military had awarded General Dynamics a no-bid contract that promised to reimburse its expenses for maintaining the Strykers while adding a fee, giving the company little incentive to control costs.

Yes, that would be wrong. Because freedom and SHUT UP.

BTW I find it amusing that the article quotes Lexington Institute “defense analyst” Daniel Goure, who is quoted as saying of the error,

“This is truly much ado about nothing” he said. “It’s essentially miscommunication.”

Goure appears all over the mainstream press with regularity. You’ll see him quoted in the New York Times and he’s on NPR, Fox and NBC, to name a few. As he was in this story, Goure is always identified merely as a “defense analyst with the Lexington Institute.” First of all, he’s a vice president, not a mere “analyst.” And then, of ocurse, no one ever bothers to mention that Goure worked in the Bush Administration Defense Department, was part of the PNAC study group that gave us the glorious Iraq War, and that the Lexington Institute is another one of those free-market, the-Constitution-is-cemented-in-the-18th-Century far-right talking point factories which has taken such extreme positions as advocating we withdraw from NATO. Furthermore, the Lexington Institute is funded by the same defense contractors that its “analysts” are always defending in the press (indeed, Lexington Institute founder James Courter was a lobbyist for such defense contractors as Lockheed Martin and SRI International.) So, y’know, just your average military industrial complex neocon.

This $900 million “no big deal” is proof of the grift and graft you get when the for-profit private sector bellies up to the government sugar tit. But again, it’s no big deal! Only $900 million! Quit yer whining! (By the way, that’s 90 times more than what we give Big Bird.)

Fiscal phonies.

By the way, we only needed 15 pinions but somehow managed to buy 9,179 of them? And nobody noticed? Shouldn’t there be some kind of Congressional investigation?

I found this profile on Paul Ryan from April’s New York Magazine, and it’s definitely worth reading. Not surprisingly, we learn Ryan is just another fiscal phony, using popular Randian language to basically gut the social safety net and transfer wealth to the top. For example:

In 2005, when Bush campaigned to introduce private accounts into Social Security, Ryan fervently crusaded for the concept. He was the sponsor in the House of a bill to create new private accounts funded entirely by borrowing, with no benefit cuts. Ryan’s plan was so staggeringly profligate, entailing more than $2 trillion in new debt over the first decade alone, that even the Bush administration opposed it as “irresponsible.”

When Democrats took control of Congress in the 2006 elections, they reimposed a budget rule requiring that any new spending or tax cuts be offset by new revenue or spending cuts. Ryan opposed it, preferring to let new spending or tax cuts go on the national credit card. Instead, he continued to endorse Bush’s line that tax cuts were leading us to a glorious new era of prosperity and budget balance. “Higher revenues flowing into the Treasury, as a result of economic and job growth, have given us a real chance to balance the budget,” Ryan announced in 2007. “The president’s budget achieves the important goal of balancing the budget in the near term—without raising taxes,” he wrote in August 2008.

Woopsies. Looks like someone needs a new calculator.

That most Republicans are fiscal phonies is nothing new. Earlier this year I called out local fiscal hawk Tim Pagliara, who claimed “the American people are tired of hearing about birth control pills,” because what he really wanted was to discuss the budget deficit and get the Bowles-Simpson Plan passed. That what’s really important, he said — not women’s reproductive healthcare, but lowering the budget deficit. That’s why he gave $1,000 to Marsha Blackburn’s campaign, which she used to stage “religious freedom” rallies that were really attacks on the birth control insurance mandate. When he should have been donating to Rep. Jim Cooper, the Democrat, who has spent umpteen amount of hours trying to get Bowles-Simpson passed.

I’m sure Pagliara is doing double-back handsprings of delight over the Romney-Ryan ticket; that’s what the CEO of CapWealth Advisors should be doing, right? No way would he ever support the Socialist-anti-Colonialist Kenyan usurper. I wonder if he and others like him know that Paul Ryan is the one responsible for killing Bowles-Simpson? From New York Magazine’s profile:

Yet Ryan has not altered his opposition to green-eyeshade fiscal conservatism. In 2010, Ryan was a member of a bipartisan committee, chaired by Erskine Bowles and Alan Simpson, to formulate a plan to reduce the deficit, but voted against it. (The plan included a tax increase.) Last year, another, informal bipartisan collection of senators released an agreement for a wide-ranging plan to reduce the deficit, combining lower spending with a tax-reform plan designed to increase revenue. It seemed to be gaining momentum quickly until Ryan attacked it, thus dropping what a Republican Senate aide called a “bomb” that blew apart Republican support for the plan.

In fact, with the possible exception of anti-tax activist/Bond villain Grover Norquist, nobody has done more in recent years to prevent the passage of a bipartisan debt agreement than Paul Ryan. And yet, incredibly, Ryan has managed to position himself as the nation’s foremost spokesman for the cause of bipartisan deficit reduction. Possibly his favorite accusation against Obama, one he repeats day after day, is that he failed to openly endorse the Bowles-Simpson plan. Thus Ryan regularly holds forth on this subject in a way that seems genuine and even admirable to his audiences but, to anybody who happens to recall his actual role in these events, utterly surreal.

Ah well. These folks really don’t want the reduce the deficit, we all know it. They just want to not pay taxes. It’s all “me, me, me” with this crowd. Hey, I give money to charity so that’s my version of paying taxes! Yeah, well, y’know there just aren’t enough of you people doing that, at a large enough level, and going in the right charities, to make up for all the misery and pain you’ve caused by trashing the social safety net.

The funniest (in a very very sad way, not a ha ha way) story I’ve heard is about the Tea Party guy who is bitching and moaning about having to spend down all of his mother’s assets so she can qualify for Medicaid and get the round-the-clock nursing care she needs. Dude, if you hadn’t been voting Republican all of these years, and rallying in your tea-bag adorned hat against healthcare reform, you wouldn’t have to do that.

Sen. Lindsay Graham, R-S.C., translated Cheney’s argument that defense spending is “not a spigot you can turn on and turn off, that you need to keep money flowing in a predictable way so you can plan for the next war.”

Ah, yes! We must “plan for the next war”! This is what we call the Permanent War Economy. Because if we didn’t “plan for the next war,” then what? What other options might be at our disposal the next time some uneducated people from a rudimentary Third World country terrorize the nation armed only with boxcutters? Amazing to think of the possibilities.

Indeed, this was the entire point of Rachel Maddow’s excellent book, Drift. If we’re constantly planning for the next war then war becomes inevitable. This was not what the founders of our nation intended — far from it.

“Were armies to be raised whenever a speck of war is visible in our horizon,” he warned Congress in his sixth annual presidential message, “we never should have been without them. Our resources would have been exhausted on dangers which never happened, instead of being reserved for what is really to take place.”

Of course, America’s history is not one of being on a permanent war footing, as Maddow notes. Far from it. We didn’t plan for World War II — World War I was supposed to be “the war to end all wars,” remember? Consumers sacrificed, industries were nationalized, men signed up for the armed services, Rosie The Riveter went to the factory, Mom canned produce from the victory garden, families bought war bonds, and Hollywood went to work churning out the propaganda. In less than four years it was all over. Amazing, isn’t it? Our soldiers returned victorious and we rewarded them with an incredibly generous thank-you: the GI Bill offered low-interest mortgages, business loans, tuition and living expenses for those wishing to go to college or vocational school, unemployment compensation, and more.

Yes of course. Because you don’t stand down in the Permanent War Economy. Wars never end. Occupations never end. We must feed the beast. We must give people an incentive to sign up for military service, and removing other viable options for employment and opportunity are a great way to go about that. In the Permanent War Economy, we must keep “planning for the next war.” The cycle never ends.

Or does it? Alternately, we can take Graham and Cheney at their word and realize what they’re really saying: war is a choice. We really don’t need to “plan for the next war.” Our military is already 10 bazillion times bigger than that of every other nation on earth combined. Can’t we just say we’re done and call it a day?

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

[…]

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

It’s the death of yet another right-wing meme. Apparently the “fighter pilots of capitalism” — some of them at least — really do want the government to raise taxes on the wealthy. Imagine that!

I’m sorry I don’t have more time today to delve into this, because it’s the final nail in the conservative coffin. We know trickle-down doesn’t work, we know higher taxes don’t cause rich people to “go Galt” and head off to … I dunno, Somalia or some place. We know forcing middle class Americans to shoulder the national tax burden has ruined the economy. We know cutting government spending at a time when lower demand has caused the private sector to curtail hiring has led to higher unemployment. We know that sometimes you have to spend money to make money, and in the case of a catastrophic economic downturn, if the private sector won’t hire, the government must and that means temporary, short-term deficits.

Instead we have these free market fairy tales bringing the country to the brink of economic collapse.

Now, I don’t hang out with a lot of really rich folks, we don’t belong to a country club, we don’t have a yacht, we don’t move in those circles. But I’ve talked to a couple of people in that world, people I work with, music people, Wall Street people. Not a lot of these folks, just a handful. But I haven’t spoken to one millionaire who said they didn’t want their taxes raised. Maybe the few I know are just hippies or something, I dunno. But in the throes of the debt ceiling debate one Wall Street type told me he would rather have his taxes raised than deal with a market crash. “I could pay more,” he said. “I would rather pay more than lose what I do have in a market collapse.”

I just have to wonder who the super rich the Tea Party is supposedly coddling are. If billionaires like Warren Buffett want the country to return to a sane tax policy where “shared sacrifice” really means something, then who’s fighting it? The Koch brothers? Do the Kochs really think if the country spirals into an economic collapse people are going to line up to buy their StainMaster carpets and Lycra yoga pants and Supplex jogging gear and hunting trips to the Matador Ranch and Koch-refined gasoline for the SUV?

This isn’t a class war, it’s an ideological one. We’re fighting a group of people who, all evidence to the contrary, still believe that “freeing the market” to run roughshod over people is the way to go. That might have been true a few decades ago but we all live and work in a global marketplace now, and absence of any moderately protectionist policies just lowers American standards, it doesn’t raise those of the rest of the world. That’s what we’re dealing with here.

Even after the collapse of 2007, even after 30 years of wage stagnation, we still have people stubbornly attached to their crazy ideas which they are convinced will work this time. It didn’t work under Bush but by golly, he just did it wrong! It will work this time, honest! This is so crazy I have to think there’s something else going on. Something psychological, like maybe if they admit they were wrong and their economic model has a flaw, that means they were wrong about everything else, too.

“China has intervened massively in the foreign exchange markets for at least five years, buying at least $1 billion every day to keep the dollar strong and its own renminbi weak,” Fred Bergsten, president of the Peterson Institute for International Economics, said in the text of a speech.

“This is by far the largest protectionist measure adopted by any country since the Second World War — and probably in all of history,” Bergsten said.

Bergsten estimated the China’s renminbi, also known as the yuan, is currently undervalued by at least 20 percent against the U.S. dollar as a result of China’s currency intervention.

That “is the equivalent of a subsidy of 20 percent on all China’s exports and an additional tariff of 20 percent on all China’s imports,” Bergsten said.

I know, just because China does something doesn’t mean we have to do something. But we really could have some modestly protectionist policies in place, you know, “for the duration.” One thing that annoys the hell out of me is hearing Democrats decry Washington gridlock by saying “there are some things we all agree on. Free trade agreements, for example. Let’s do those.”

No we most certainly do not all agree on free trade agreements! Free trade agreements are why American manufacturing has shipped overseas and the only jobs left for Americans are WalMart greeter and Wall Street trader. Come on, quit acting like there isn’t disagreement on this issue, because there is.

I don’t have time to go into any more depth on this, hopefully I’ll get back to you later in the week. But seriously: we’ve got some complicated problems right now, and they won’t be solved by bumper-sticker bromides, conservative fairy tales, or Democrats too afraid that Fox News will say mean things about them.

We need government policy that raises taxes on the wealthy and encourages job creation at home not abroad. When people have jobs they have income, and when they have income they buy shit. This ain’t hard, people.

Q: What’s the difference between a single mother on welfare and the F-35 fighter jet?
A: The welfare mom actually works:

August 5, 2011 (by Lieven Dewitte) – For the third time in less than a year, the Pentagon has grounded all F-35 joint strike fighters because of a mechanical problem. The F-35s thus join the F-22 Raptors in stand down mode.

All flight and ground operations for the Joint Strike Fighter were ceased after the integrated power package (IPP) on a U.S. Air Force variant test aircraft failed on August 2nd during a ground maintenance run at Edwards Air Force Base.

The 20 operational test and training aircraft were parked and will stay that way until engineers and technicians can find why a power system that starts and cools the aircraft failed during an engine ground test Tuesday at Edwards Air Force Base in California. Flight and ground tests could potentially be suspended for a few weeks.

The Air Force, Navy, Marine Corps, and many foreign partners plan to buy thousands of the fighter-attack jets over the next two decades to replace a variety of aging aircraft, but the development schedule of the stealthy fighter has slipped five years to 2018 and the projected cost to the Pentagon for 2,457 aircraft has ballooned to $385 billion, making it by far the most expensive weapons program in history.

The Government Accountability Office reported that although Pentagon management of the program is improving, developers have only completely verified 4 percent of the F-35’s capabilities. The program received another blow this week when the Senate Armed Services Committee learned that the Pentagon will likely have to spend $1 trillion over the next 50 years to operate and maintain the fleet of F-35s. Evidently reeling from sticker shock, Sen. John McCain demanded that “we at least begin considering alternatives.” But is it too late to prevent the F-35 program from devouring the Pentagon’s future procurement budgets?

After the painful debt ceiling political theater we just endured, though, this is a hard pill to swallow. I just can’t believe we’re cutting programs vital to people’s health and welfare while sinking hundreds of billions of dollars into the bottomless pit that is the Pentagon. And yes, this truly is a black hole:

Air Force officials themselves may now doubt the wisdom of the size of the commitment to the F-35. According to a recent Aviation Week story, Air Force Undersecretary Erin Conaton placed new emphasis on the importance of the Air Force’s next-generation long-range bomber. With procurement funds sure to be tight in the decade ahead, Conaton hinted that the Air Force may have to raid the F-35’s future budgets in order to help pay for the new bomber.

Ah well, nothing to see here, let’s move along to the next trillion dollar bomber program! Bygones!

You know what’s funny? President Obama has already pledged to cut $400 billion from defense, while Leon Panetta has said anything over $350 billion would be tragic. So I guess that means we’ve agreed on $385 billion, the cost of this one failing program, hmm? You wanna bet?